Summary
Indian sugar industry has entered the strongest up cycle (lowest stock to use ratio) in the history of 50 years after witnessing supply glut in previous two sugar seasons in a row (SS 2006-08). In SS2006-07, sugar production reached all-time high of 28.3 mn tonnes, registering a growth of 46.6% on yoy basis and it declined marginally by 7.1% to 26.3 mn tonnes in SS2007-08. Sugar production reached an all-time low of 14.7 mn tonnes during SS2008-09 due to sharp fall in the sugarcane acreage. However, sugar consumption continued to grow at a steady pace. It grew at a CAGR of 4% during SS 07-09.
In SS2008-09, on account of a steep fall in sugar production and fall in the stock to use ratio, the average wholesale prices increased by almost 50% on yoy basis. This had a positive impact on the margins of sugar companies in the Q4FY09.
The production of sugar is spread across the country. Maharashtra, Uttar Pradesh, Karnataka, Tamil Nadu, Gujarat and Andhra Pradesh are the major sugar producing states in the country. In SS2007-08, these six states together accounted for almost 92% of the total sugar produced in India. In SS2007-08, the State of Maharashtra produced the highest sugar at 9.1 mn tonnes followed by UP with 7.3 mn tonnes. These two states together account for almost 62% of the total sugar produced in India.
Sugarcane is the primary raw material for the sugar industry. It accounts for almost 75%-80% the total operating cost of the sugar industry. UP is the largest sugarcane-producing state in the country and accounted for about 37% of the total sugarcane output in SS 2007-08 followed by Maharashtra with 24%. Even though, UP is the largest sugarcane-producing state in the country it is the second-largest sugar producer in India as drawal and recovery rates in UP are one of the lowest in India.
We expect sugar deficit situation in India to continue in SS2009-10 and SS2010-11. We believe that India will bridge the gap between demand and supply through imports. We expect that sugar prices will continue to rise till SS2009-10 on account of tight demand and supply situation in country.
Table of Contents
Executive Summary
Outlook
Introduction
?
Overview?
*Structure of Industry
*Contribution to Indian Economy
*Evolution
?
Characteristics?
*Fragmented Industry
*Regulated Industry
*Raw Materials in Close Vicinity of Sugar Plants
*Cyclical Industry
*Seasonality
*Working Capital Intensive
*Geographical Spread
Types of Sugar
*Granulated Sugar
*Brown Sugar
*Liquid Sugar
Government Regulations and Incentives
?
Policies related to Sugarcane
*Sugarcane Pricing
*Sugarcane Procurement
Policies Related To Sugar
*Domestic Sales
*Exports
*Imports
Demand & Supply
Pre 1990 Era
Post 1990s
*Demand & supply scenario in SS 1990-91 to
SS 2002 -2003Period?
*Demand & Supply Scenario in SS 2003-04
*Demand & Supply Scenario in SS 2004-05?
*Demand & Supply Scenario in SS 2005-06
*Demand & Supply Scenario in SS 2006-07?
*Demand & Supply Scenario in SS 2007-08
*Demand & Supply Scenario in SS 2008-09?
Demand Drivers
*Growing Population & Per Capita income
*Lower Per Capita Consumption
?
Supply Drivers
*Sugarcane Availability
*Drawal Rate?
*Recovery Rate
*Political Factor
State-wise Scenario
?
State-wise Analysis
*Maharashtra
*Uttar Pradesh (UP)
*Karnataka
*Tamil Nadu
*Gujarat
*Andhra Pradesh
Global Scenario?
*The Brazil Impact
By-Products
*Bagasse
*Molasses
*Business Model Analysis
Cost & Margin Analysis
Cost
*Sugarcane Production
*Sugarcane Pricing
?
Margins
Sugar Prices
Company Profile
*Bajaj Hindusthan Ltd.
*Balrampur Chini
*Renuka Sugar Ltd.
*Triveni Engineering & Industries Ltd.
Annexures
*Monthly Sugar Production Trend
*Statewise Area under sugarcane in India
*Statewise Duration of Crushing Season
*Statewise Molasses Production Trend
*Statewise Number Factories in Operation
*Statewise Sugar Production Trend
*Statewise Sugar Recovery Rate?
*Statewise Sugarcane Crushed by Sugar Mills
*Statewise Sugarcane Production Trend
*Statewise Sugarcane Yield?
*Statewise Utilisation Trend
List of Tables
Introduction
structure of the industry during SS2007-08
Number of factories in operation and average capacity of mills
Comparison of regulatory environment in top 4 sugar producing countries
Top 5 Sugarcane and Sugar producing states in India in SS 2007-08
Government Regulations and Incentives
Trend in Statutory Minimum Prices
Trend in State Advised Prices
Sugarcane pricing policy
Demand & Supply
Statement showing area under sugar cane production, yield and sugar production
Demand-Supply Trend
Statement showing area under sugar cane production, yield and sugar production
Demand-Supply Trend
Yield rates in major sugar producing states
drop in the sugarcane yields and increase in the utilisation of sugar for Gur and Khandsari
Area under sugarcane cultivation in top 5 sugarcane producing states
Comparison of SMP on Wheat and Sugarcane
Sugarcane scenario: Top 5 states
Steady growth in sugar consumption and population
Trend in Recovery rate
State-wise Scenario
Sugarcane & Sugar production trend of top 6 states
Statement showing area under sugar cane production, yield and sugar production
the capacity expansion of few UP based companies
Statement showing area under sugar cane production, yield and sugar production in UP
Statement showing area under sugar cane production, yield and sugar production?
Statement showing area under sugar cane production, yield and sugar production in TN
Statement showing area under sugar cane production, yield and sugar production
Statement showing area under sugar cane production, yield and sugar production in AP
Global Scenario
Top 10 sugar producers in SS 2007-08
Global Demand-Supply Trend
Crushing update of Central-South region SS 2009-10
By-Products
State-wise annual co-generation capacity in India
ethanol requirement at 5% blending programme vs. 10% blending programme
Non Integrated Model: Sugar +Molasses +Bagasse
Partially Integrated Model: Sugar + Ethanol +Bagasse
Partially Integrated Model: Sugar + Molasses +Power
Fully Integrated Model: Sugar + Ethanol +Power
Cost & Margin Analysis
Company-wise Raw material cost in FY 09
major sugarcane producing states in tropical and sub-tropical regions
Company-wise sugarcane cost
List of Figures
Introduction
Domestic Demand and Supply trend
Major Sugarcane and Sugar producing states in India in SS 2007-08
Sugar production cycle
Closing stock as percentage of domestic consumption
Month-wise production trend of sugar
Trend in Net working capital to Net sales Ratio of the sugar industry
Demand & Supply
Sugar production trend in pre 1990 era
Sugar production trend during 1991-2008
Increase/Decrease in SMP prices of various crops
Demand & Supply Scenario in 2008-09
Steep fall in sugarcane acreage led to sugar crisis
Consumption Pattern
Per capita consumption of sugar
Trend in drawal rate
Monthly release order of non-levy sugar
State-wise Scenario
Share of top 6 sugar producing states
Sector wise distribution of sugar production capacity
Trend of sugar crushing season
Trend of recovery rate
Sector wise distribution of sugar capacity
trend of sugar crushing season in the state vis a vis all India crushing season
Trend of recovery rate
Global Scenario
Global Sugar Production Trend
Top 5 sugar exporting countries in SS 2007-08
Top 5 sugar importing countries in SS 2007-08
International Raw sugar Prices
Brazil- Sugarcane Production Trend
Brazil- Sugar Production Trend
Brazil-Sugar Exports trend
By-Products
Fully/ Partially Integrated players vs Non integrated players
Cost & Margin Analysis
Sugarcane Components
Sugarcane production trend
Trend of sugarcane arrears
Trend of PBDIT and PAT Margin
